TTWO Q2 2025 Earnings

Call Details

• Call Title: Take-Two Interactive Q2 2025 Earnings Call
• Date: November 6, 2024 at 9:30 PM UTC
• Management Team:
  • Strauss Zelnick (Chairman and Chief Executive Officer)
  • Karl Slatoff (President)
  • Lainie Goldstein (Chief Financial Officer)
  • Nicole Shevins (Senior Vice President of Investor Relations and Corporate Communications)

Call Summary

Financial Performance

• Net bookings for Q2 were $1.47B, which was at the top end of the company's guidance range of $1.42 to $1.47B.
• GAAP net revenue for the quarter increased 4% year over year to $1.35B.
• Cost of revenue declined 29% year over year to $625M, with prior year including an impairment related to acquired intangibles.
• Operating expenses on a GAAP basis rose 7% year over year to $1.0B, while on a management basis operating expenses rose 24% year over year.
• Recurrent consumer spending increased 6% for the period and accounted for 81% of net bookings for the quarter.
• Key catalog unit milestones disclosed include Grand Theft Auto V selling more than 205 million units and Red Dead Redemption 2 selling more than 67 million units.

Guidance

• The company reiterated full fiscal 2025 net bookings guidance of $5.55 to $5.65B, which the company stated represents 5% growth over fiscal 2024.
• The company updated its recurring consumer spending outlook to approximately 4% for fiscal 2025, representing 78% of net bookings and up from a prior internal forecast of 3%.
• Full year GAAP net revenue is expected to range from $5.57 to $5.67B, and full year cost of revenue is expected to range from $2.40 to $2.42B.
• Total operating expenses for the fiscal year are now expected to range from $3.77 to $3.79B, with management-basis operating expense growth expected to be approximately 10% year over year.
• Label-level net bookings are projected to be roughly 51% Zynga, 32% 2K, and 17% Rockstar Games for fiscal 2025.
• Geographic net bookings are forecast to be approximately 60% United States and 40% international for fiscal 2025.
• Non-GAAP adjusted unrestricted operating cash flow is expected to be an outflow of $150M, which is unchanged from prior guidance, and capital expenditures are expected to be approximately $140M.